Self-employed GST - using Quick Method

[Toan Nguyen]

Hi there,

I started working as a web-design contractor and earned more than $30,000 for the year 2023. I didn't know that I needed to pay GST until doing my tax return. Then I registered for a Business Number for Sole Proprietorship and GST number in May 2024; I haven't remitted any GST to CRA until now. 

Let's say, I live in BC. I charged for my work at $7,400 monthly since March 2023. I stopped being a small business on August 1st, 2023 because that day was the end of the month after the quarter, and I exceeded the $30,000 threshold. Hence, I earned $74,000 (included $1,762 GST (5% of $35,238) was collected in 2023). Is using Quick Method of Accounting for the GST/HST eligible? How do I enter the amount to "Income and Expenses"? And how much should GST have to remit to CRA?

On the line for "Gross sales, commissions or fees", would be $74,000?

On the line for "Quick method - GST/HST collected or collectible on sales...", would be $1,762?

On the line for "Quick method - for each applicable remittance rate...", would be $1,032?

Kindly help me.

[Maggie3]

Hello Toan Nguyen,

Hello,

The information required to use the Quick Method of Accounting is available on the CRA website.

The CRA provides  a broad range of information for this topic.

You may access this by clicking on the link below:

https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4058/quick-method-accounting-gst-hst.html

 If you earned more than $30,000 in the tax year, you must remit GST /HST to the CRA.

 You may also remit your GST by completing a GST return. Refer to link below for more information:

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/complete-file-return-business/file-return.html

 If you  made the choice to use the Quick Method of Accounting for the GST/HST.

 1. On the line for "Gross sales, commissions or fees", you must not include GST/HST collected or collectible.

2. On the line for "Quick method - GST/HST", enter the GST/HST collected or collectible, eligible for the Quick Method of Accounting.

3. On the line for "Quick method - for each applicable remittance rate", you must enter the amount of the GST/HST you have remitted.

4. For expenses, they must be entered with taxes, except eligible capital expenses that must be entered without taxes.

The T2125 will correctly report your gross income before your business expenses on line 8299.